Recent content by osx

I hate to break it to you guys, but the proposal is for a two year pilot to eliminate the uptick rule for half of the 600 most liquid stocks in the Russell 1000... not the top 300: ``To select the stocks for the pilot if we were to use the Russell 1000, we would sort the Russell 1000 by...

:-) No, but I admit to daydreaming about pitching such a thing to the "powers that be". Notice in the proposed short sale rule amendments: http://edgar.sec.gov/rules/proposed/34-48709.htm ``The SROs have adopted rules generally requiring that, prior to effecting short sales, members...

How does the "bear crowd broker" know whether the short is out of thin air ("vapor stock") other than by locating? What is the mechanism?? You must agree that location does not accomplish a determination of "excessive" for the sum total of short sellers at a given moment. A broker might...

"Excessive" (what does that mean?) naked shorting is not illegal so long as you have the cash to back the position and locate the stock. Can you point to a regulation that states otherwise? Note that I am not talking about manipulation but about genuine large scale "public knowledge"...

Today's system without an uptick rule would allow for there to be more *intraday* short interest than there are issued shares of MSFT -- much more. "Location" won't stop it, "not hard to borrow" won't stop it, nothing will stop it other than the uptick rule. For example, every Microsoft...

Ha! ``If that goes well...'' Of course it will go well unless someone schedules a market collapse to take place during the trial period. This is not something that can be experimented with-- if they are going to remove the rule then they need to prove through economic theory that it will work...

Hard to borrow is not relevant for a day trade since borrowing is not relevant for a day trade. That is the loophole that the uptick rule closes (in a bad, too restrictive way). If you short and then cover huge amounts of a hard or impossible to borrow stock that is *locatable* then nobody...

Well, consider this: the rule was just implemented in Japan. I don't think it is going away soon.

Ah, but shorting a derivative is just writing a contract! That is different than selling something you don't own. If the contract is exercised and at *that* point you need to sell something you don't own (to make delivery according to the terms of the contract) then you must borrow or buy it...

I know there is a popular belief out there that eliminating the uptick rule will create a symmetric marketplace. That is *not* true! Imagine: Something horrible happens to a stock or even to the whole market and everyone long starts selling. Everyone who is not long starts selling...

The real problem here is the way the SEC is going about this. They should just make a rule that being long stock is a function of the entire portfolio including derivatives. Synthetic stock of various types, including single stock futures, would be considered stock for uptick compliance...